Frequently asked questions
Bonds are debt securities (financial instruments) through which an investor (bondholder) lends money to a bond issuer for a fixed period of time at a pre-determined interest rate. The bond issuer is obliged to pay the investors an interest rate or coupon at regular intervals (e.g. quarterly) and to repay the principal amount of the bond (originally borrowed funds) to the investors upon maturity.
What is the interest rate on the LATRAPS bonds?
Under its bond issuance, LATRAPS offers a fixed interest rate of 7.5% per annum, with interest payments made quarterly to investors. At maturity, the company is also obligated to repay the investor the original principal amount of the investment.
What does a fixed interest rate mean?
The interest rate is the rate paid by the issuer to the investor in accordance with the Information Document. This rate is fixed and does not change until the maturity date of the bonds.
What does the Information Document mean?
The Information Document is an alternative to a prospectus, prepared in accordance with regulatory requirements and containing essential information about the securities offering. In cases where the issuer plans to raise no more than EUR 8 million, the issuer is exempt from the obligation to prepare a prospectus under Article 16.1 of the Financial Instruments Market Law.
Where can I find LATRAPS Information Document?
LATRAPS Information Document, prepared in accordance with the exemption from the obligation to prepare a prospectus under Article 16.1 of the Financial Instruments Market Law is available on the LATRAPS website at https://www.latraps.lv/data/investoriem/information-document-latraps-2024-signed.pdf
What are the risks associated with subscribing to LATRAPS bonds?
Investors are invited to carefully review the risks related to LATRAPS bonds in the Information Document, which is available at https://www.latraps.lv/en/services/forinvestors
How will LATRAPS use the funds raised through the bond issue?
The proceeds from LATRAPS bond offering will be invested in the development of the ASNS Ingredient project, the largest pea protein isolate production facility in Northern Europe, located in Latvia. Construction of the facility begins in December 2024.
Detailed information regarding the use of proceeds from the bond issuance can be found in the LATRAPS Information Document. Please refer to: https://www.latraps.lv/en/services/forinvestors
What is LATRAPS?
LATRAPS is a leading force in Latvia's agricultural sector, the largest agricultural cooperative in the Baltics, and among the top grain exporters in the region.
LATRAPS was established on April 22, 2000, by 12 farms from the Zemgale region (a region richer in agricultural lands) with a mission to support the growth of Latvian farmers and ensure strong representation in global markets.
Today, LATRAPS stands as Latvia's leading farming enterprise, uniting over 1,220 members who actively contribute to key governance decisions. The cooperative continues to showcase stable profitability, with net profit reaching EUR 2.8 million in the financial year ending 30 June 2024. Meanwhile, the equity ratio improved from 28% in 2023 to 32% in 2024, highlighting the company’s financial strength and robust capital structure.
The majority of the company's revenue comes from the sale of its farmer-produced goods – grain, peas, beans, and rapeseed – both locally and internationally, with exports alone accounting for 46% of total income. LATRAPSexports to over 30 countries, with key markets in 2024 including Europe (Spain, Germany, Sweden), Africa, and the Middle East.
LATRAPS owns a total of 8 grain acceptance and pre-processing service centers, as well as 26 grain acceptance points across Latvia in cooperation with partners. The company has the capacity to store close to 230,000 tons. In addition, LATRAPS owns both a rapeseed oil production plant and a malting plant.
LATRAPS continues to serve as a benchmark for innovation, sustainability, and development, advancing Latvia into global markets with high-value-added products, as demonstrated by the new ASNS Ingredient project.
What is the competitive advantage of LATRAPS?
Since 2000, over its 24 years of operations, LATRAPS has demonstrated consistent growth and resilience, supported by robust infrastructure and the global demand for grain commodities. The cooperative's success and achievements are driven by three core components:
1. Global reputation for competence, reliability, and transparency. On a global scale, LATRAPS is recognized for its expertise and trustworthy operations. Acting as an intermediary between grain traders, the commodities exchange, and farmers, LATRAPS ensures an efficient and transparent supply chain for international markets.
2. A resilient financial model that mitigates market risks. LATRAPS holds a unique position by not taking on the risk of price fluctuations in grain sales. Instead, the cooperative applies a markup for its services, regardless of changes in grain prices on the stock exchange. This mechanism ensures the financial stability and long-term reliability of the cooperative, allowing its members to benefit from international markets while minimising risks.
3. Innovating for the future. Partnering with industry leaders. The cooperative strategically invests in innovation and expands into new areas to create higher-value products. Collaborating with European food industry leaders like Pfeifer & Langen, LATRAPS has undertaken significant initiatives such as the ASNS Ingredient project. This venture centers on pea protein production, a promising crop for the future, aligning with the growing global demand for plant-based proteins and contributing to both agricultural sustainability and profitability.
What are the growth plans of LATRAPS?
LATRAPS plans for the coming years include several investments focused on sustainable growth and strengthening the cooperative’s role and recognition in both domestic and international markets.
Firstly, the cooperative plans to expand its membership, emphasizing the importance of cooperation and improving agricultural efficiency. Secondly, LATRAPS will increase the volume of grain and rapeseed exports, with a particular focus on new markets outside Europe. Furthermore, the cooperative will continue investing in logistics and infrastructure improvements to optimise grain storage and transportation.
Finally, LATRAPS, like successful cooperatives in France and Germany, is expanding its operations into new areas that focus on producing higher value-added products, exemplified by the ASNS Ingredient project.
What is the ASNS Ingredient project and its objectives?
ASNS Ingredient will be the first pea protein isolate production facility in Latvia and Northern Europe. The facility will implement innovative technologies to enhance production processes and make them environmentally friendly. The planned production capacity is 69,000 tons, with the potential to increase to 120,000 tons. Initially, 98% of the output will be directed to export markets.
The scale and potential of this project are underscored by strategic partnerships with Pfeifer & Langen, one of Europe's leading food industry players.
Overall, this project marks Latvia's entry into the global agricultural market, offering high-value-added products that meet the rapidly growing international demand for plant-based protein sources. In addition to its direct economic impact, the project will create new jobs and drive economic growth in Latvia and the broader region.
What are the latest financial results of LATRAPS?
In the most recent financial year ending on 30 June 2024, LATRAPS demonstrated stable profitability. The company’s net profit increased to EUR 2.8 million. At the same time, the equity ratio improved from 28% in 2023 to 32% in 2024, reflecting the company’s financial stability and robust capital structure.
Investors can access the detailed financial report on the website: https://www.latraps.lv/data/investoriem/latraps-financial-statements-30.06.2023.pdf
Where can investors find the latest information on the news and results of LATRAPS?
The latest updates on LATRAPS, including the results of the bond issue, are available on the LATRAPS website at https://www.latraps.lv/en/services/forinvestors
Agriculture is the leading economic sector in the Baltics. Grain farming benefits from highly favorable conditions and optimal climatic factors, resulting in stable production volumes year after year.
Wheat and barley grown in the region are sold to local processors and manufacturers, as well as exported to various European and African countries. Meanwhile, rapeseed is sold to processors within the region and delivered to other European countries.